Asian stock markets gained amid speculation Japan, the world's second-largest economy, will reduce interest rates. OPEC will ``probably'' lower quotas to avoid inventory growth, Venezuela's Oil Minister Rafael Ramirez said. Oil also gained as the Financial Times cited an International Energy Agency draft report saying global crude output is falling faster than expected.
Crude oil for December delivery climbed as much as $3.98, or 6.3 percent, to $66.71 a barrel on the New York Mercantile Exchange. It was at $64.84 a barrel at 3:45 p.m. Singapore time. Prices reached a record $147.27 on July 11.
Yesterday, futures fell 49 cents, or 0.8 percent, to $62.73 a barrel, the lowest close since May 16, 2007, after a Conference Board report showed the lowest confidence reading since records began in 1967.
U.S. equities rallied as the cheapest valuations in 23 years lured investors and increased commercial-paper sales signaled credit markets are thawing. The Dow Jones Industrial Average posted its second-best points gain in 23 years, climbing 889.35, or 11 percent, to 9,065.12. The MSCI Asia Pacific Index gained 3.7 percent as of 3:13 p.m. in Tokyo.
Global oil output is falling faster than expected, leaving producers struggling to meet demand without extra investment, the Financial Times said, citing a draft of an IEA report.
Annual production is set to drop by 9.1 percent in the absence of additional investment, according to the draft of the agency's World Energy Outlook obtained by the newspaper, the FT reported. Even with investment, output will slide by 6.4 percent a year, it said.
The shortfall will become more acute as prices fall and investment decisions are delayed, the newspaper said. The IEA forecasts that the rising consumption of China, India and other developing nations requires investments of $360 billion a year until 2030, it said.
The Organization of Petroleum Exporting Countries' secretary-general said yesterday the group may call a new meeting if prices, down 56 percent from July's peak, fail to react to last week's 1.5 million-barrel-a-day output reduction.
Brent crude oil for December settlement rose as much as $3.90, or 6.5 percent, to $64.19 a barrel on London's ICE Futures Europe exchange. It was at $62.27 a barrel at 3:45 p.m. Singapore time. The contract yesterday dropped $1.12, or 1.8 percent, to settle at $60.29 a barrel, the lowest settlement since March 20, 2007.